YouTube’s Methods Channel Unrest

The YouTube channel has more than 1 million subscribers and recently crossed the 1 billion mark for video views. Monthly advertising revenue reportedly is in the six figures, and that and other revenue streams have allowed the Culver City company to build up a staff of 30.

But Steve Oh, its chief operating officer, thinks the network should be even bigger. And so should many other YouTube stars, for that matter.

The blame for why they aren’t, he said, lies partially with the video website.

“YouTube’s promotion is entirely based on algorithms and search,” Oh said. “They don’t give a crap about your star potential”

To be fair, Oh maintains that he’s a big fan of YouTube. The Google Inc.-owned site invested in TYT Network, Young Turks’ parent company, as one of the recipients of its partner program, which was set up last year to fund original content.

“We trust them inherently,” Oh said.

Yet criticisms of the site – something that was nearly unheard in the earliest days of the push for original content – are cropping up. While overall feelings between channels and YouTube remain positive, there is a growing sense from some fledgling networks that policies might need to evolve to better benefit creators.

Some, like Oh, said YouTube has to flex its promotional muscle – start being less a metrics-obsessed tech company and more a hype-fueled Hollywood studio. Others have complained about the share YouTube takes for ad revenue. The amount varies from deal to deal, but the most commonly discussed split is 55-45 in favor of the networks.

Jason Calacanis, founder of Culver City YouTube network Inside, has been particularly noisy on the latter topic. Last month he posted a note on his personal blog announcing that he had turned down Google’s latest funding offer in the partner program, finding the terms of their relationship to be onerous. YouTube’s share of ad revenue was too big, its sales team too weak and the company too withholding with subscriber information, he wrote.

“If YouTube met us halfway on two or three of those issues, I would have kept working with them, but YouTube has a ‘take it or leave it’ approach to partnerships,” Calacanis later wrote in an email to the Business Journal.

While Calacanis’ post put a point on an issue that had caused grumblings for some time, YouTube defended its promotion and revenue-generation efforts in a statement to the Business Journal.